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Finance & AccountingFinancing

Commitment Letter

This Commitment Letter template is used by a financial institution or investor to formally commit to providing financing to an SME, outlining the terms and conditions of the funding. It is used after initial discussions but before the final legal agreements are drafted.

Updated 16d ago
financingcommitment letterfundinginvestmentloan agreementSME finance

Letterhead

{{company_name}}

{{company_address}}

Phone: {{phone}}

Email: {{email}}

Website: {{website}}

Date and Addressee

{{date}}

{{recipient_company_name}}

{{recipient_company_address}}

Attention: {{recipient_contact_person}}

Dear {{recipient_contact_person}},

Subject: Commitment to Provide Financing

This letter confirms the commitment of {{company_name}} (the “Lender/Investor”) to provide financing to {{recipient_company_name}} (the “Recipient”), subject to the terms and conditions outlined herein.

Financing Details

**Amount:** The total amount of financing committed is {{currency}} {{amount}} ({{amount_in_words}}).

**Purpose:** The financing is intended for {{purpose_of_financing}}.

**Type of Financing:** This financing will be structured as {{type_of_financing}} (e.g., term loan, revolving credit facility, equity investment).

Key Terms and Conditions (Illustrative)

**Interest Rate/Return:** The interest rate will be {{interest_rate_percentage}}% per annum (or {{return_on_investment}} for equity).

**Repayment Schedule:** Repayment will commence on {{repayment_start_date}} with {{repayment_frequency}} installments over a period of {{repayment_period}}.

**Collateral/Security:** The financing will be secured by {{description_of_collateral}}.

**Conditions Precedent:** This commitment is subject to the satisfaction of certain conditions precedent, including, but not limited to, successful completion of due diligence, execution of definitive legal documentation, and obtaining all necessary corporate and regulatory approvals.

**Term of Commitment:** This commitment is valid for a period of {{commitment_validity_period}} from the date hereof, unless extended in writing by the Lender/Investor.

Diligence and Documentation

The Lender/Investor will conduct further due diligence on the Recipient, its business, and its financial position. The definitive terms and conditions of the financing will be set out in a separate, comprehensive legal agreement (e.g., loan agreement, investment agreement) to be negotiated and executed by both parties.

Confidentiality

All information exchanged between the parties in connection with this commitment and the proposed financing shall be kept strictly confidential, subject to customary legal and regulatory disclosures.

Governing Law

This Commitment Letter shall be governed by and construed in accordance with the laws of {{governing_jurisdiction}}.

Acceptance

Please indicate your acceptance of the terms and conditions of this commitment by signing and returning a copy of this letter by {{acceptance_deadline}}.

Closing

We look forward to a successful partnership and the opportunity to support your growth.

Signature

Sincerely,

_____________________________

{{lender_investor_signatory_name}}

{{lender_investor_signatory_title}}

For and on behalf of {{company_name}}

Accepted and Agreed:

_____________________________

{{recipient_signatory_name}}

{{recipient_signatory_title}}

For and on behalf of {{recipient_company_name}}

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